Komatsu Takes Automated Bulldozers to Caterpillar’s Home Turf

Komatsu Ltd. (6301), the world’s second-biggest construction equipment maker, has begun sales of its automated bulldozers in the U.S., the home turf of bigger rival Caterpillar Inc., in a bid to keep pace with global competitors.

The company plans to sell as many as 500 of the new dozers, weighing 15 metric tons each, in the U.S. in three years, Tetsuji Ohashi, president of the Tokyo-based Komatsu, said in an interview. These “ICT intensive” bulldozers will eventually be driverless, he said.
Komatsu, which also designed the mining industry’s first driverless trucks, started selling the automated bulldozers in the U.S. last month and plans to phase out its standard operator-controlled models. The machines will likely attract customers in Europe and the U.S., where labor costs for vehicle operators are high, Hirokazu Miyagi, an analyst at Daiwa Securities Co., said in a June 26 report.
“It’s important we offer customers products that overwhelmingly differentiate from others,” Ohashi said in a June 26 interview. When products are similar customers will chose cheaper ones, he said.
Komatsu shares rose as much as 2.2 percent to 2,243 yen as of 9:17 a.m. in Tokyo trading. The stock has gained 5.4 percent this year, underperforming a 31 percent increase in the Nikkei 225 Stock Average.

Cheaper Models

Peoria, Illinois-based Caterpillar has sales almost three time the size of Komatsu, while Sany Heavy Industry Co. (600031), run by Chinese billionaire Liang Wengen, has expanded and become the top excavator supplier by selling cheaper models in China, the world’s biggest market.
During a demonstration of an ICT bulldozer, it took only 3 hours to train an inexperienced Komatsu worker to complete skilled works, which would usually need more than three years using a conventional model, according to the company.
The new bulldozer features fully automatic blade control and is able to perform construction works from rough dozing to finished grading, Komatsu said. The new dozer is able to automatically control its blade based on construction drawing data by making use of three-dimensional GPS information, it said.
The company introduced what it called the world’s first hybrid excavators in 2008, using a similar technology to the one powering Tokyo Motor Corp.’s Prius car. It signed a deal with Rio Tinto Group in 2011 to build a fleet of at least 150 driverless trucks for use at its Pilbara iron ore mines in Australia.

China

In China, sales in June may increase from a year ago after a decline in May, Ohashi said. Komatsu hasn’t seen any change in its underlying business in China amid market concern over the country’s outlook, he said.
China’s benchmark Shanghai Composite index of shares slid to a four-year low last week even as the central bank pledged to stabilize money markets amid a credit crunch that sent the nation’s overnight repurchase rate to a record on June 20.
Prime Minister Shinzo Abe’s economic measures will add to demand already spurred by the nation’s spending to reconstruct areas wrecked by an earthquake and tsunami in 2011, Ohashi said. Domestic rival Hitachi Construction Machinery Co. (6305) may raise domestic output to meet stronger demand, President Yuichi Tsujimoto said June 25 in an interview.
“Domestic demand has been rising recently after the domestic market suffered a long-term slump since the burst of the bubble economy in 1990,” Ohashi said. “Our orders for May were quite high, with the level not seen in the past two decades,” and the trend for Japan’s strength “will last three or four years, he said.